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Listed Below Are Seven Terms Followed by a List of Phrases

Question 144

Matching

Listed below are seven terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the number designating the term in the space provided

Premises:
Have high expectations of future earnings and therefore usually trade at higher P/E ratios.
Measure the earnings or operating effectiveness of a company.
Refers to a company's ability to pay its long-term liabilities.
Expresses each item in a financial statement as a percentage of the same base amount.
Have lower share prices in relationship to their fundamental ratios and therefore trade at lower PE ratios.
Analyzes trends in financial statement data for a single company over time.
Refers to a company's ability to pay its current liabilities.
Responses:
Profitability ratios
Vertical analysis
Growth stocks
Liquidity
Horizontal analysis
Value Stocks
Solvency

Correct Answer:

Have high expectations of future earnings and therefore usually trade at higher P/E ratios.
Measure the earnings or operating effectiveness of a company.
Refers to a company's ability to pay its long-term liabilities.
Expresses each item in a financial statement as a percentage of the same base amount.
Have lower share prices in relationship to their fundamental ratios and therefore trade at lower PE ratios.
Analyzes trends in financial statement data for a single company over time.
Refers to a company's ability to pay its current liabilities.
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